A homeowner in a sunny climate has the opportunity to install a solar water heater in his home for a cost of $ 2 comma 900. After installation the solar water heater will produce a small amount of hot water every day, forever, and will require no maintenance. How much must the homeowner save on water heating costs every year if this is to be a sound investment? (The interest rate is 11 % per year.)

Question

Patience Wilson

Business

5 April, 05:35

A homeowner in a sunny climate has the opportunity to install a solar water heater in his home for a cost of $ 2 comma 900. After installation the solar water heater will produce a small amount of hot water every day, forever, and will require no maintenance. How much must the homeowner save on water heating costs every year if this is to be a sound investment? (The interest rate is 11 % per year.)

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Answers (1)

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Megan Branch · Answer 1

319

Explanation:

Data provided as per the requirement of solution is here below:-

Interest rate = 11%

Solar water heater cost - $2,900

The computation of savings on water is shown below:-

Solar water heater cost = X : Interest rate

2,900 = X : 0.11

X = 2,900 * 0.11

= 319

Therefore the homeowner saves on water heating costs every year is 319.